NORWAY Law and Practice Contributed by: Hedvig Moe, Pål Lieungh, Espen Randen and Elin Ibsen Gustavsen, Advokatfirmaet Thommessen AS
4. Compliance, Sanctions and Embargoes 4.1 Sanctions Legislation and Regulatory Framework The central statute is the Sanctions Act. Norway bas - es its sanctions on UN and EU decisions. UN sanc - tions are binding under international law and must be implemented nationally. EU sanctions are not binding on Norway but are generally implemented following assessment of whether political considerations indi - cate that Norway should support the EU’s foreign policy line. Norway has aligned with EU restrictive measures, with few exceptions, and currently oper - ates more than 30 geographical sanctions regimes. Individual regimes are implemented through regula - tions under the Sanctions Act. Certain measures are implemented under other legislation, such as travel restrictions under immigration rules and arms embar - goes under export control legislation (see 3. Export Controls and Dual-Use Items ). The Ministry of Foreign Affairs drafts sanctions regula - tions. DEKSA handles enquiries and issues licences, and PST investigates and prosecutes breaches. The Financial Supervisory Authority transmits UN and EU designations to supervised financial institutions and supervises compliance with asset-freeze obligations. 4.2 Arms Embargoes An arms embargo prohibits the sale of arms, military equipment and dual-use materiel, and the provision of related services, to specified states or actors. Nor - way imposes sanctions based on UN Security Council resolutions and EU foreign policy (see 4.1 Sanctions Legislation and Regulatory Framework ) and currently operates more than 20 arms embargoes. Arms embargoes are predominantly implemented through export control legislation (see 3. Export Con- trols and Dual-Use Items ), rather than sanctions regu - lations, and therefore only some sanctions regulations expressly mention an arms embargo.
4.3 Screening and Due Diligence Requirements
There are no sector-specific screening obligations for defence sector participants. The general sanctions rules apply, and both wilful and negligent breaches may be punishable (see 4.7 Enforcement, Penalties and Voluntary Disclosure ). Each operator must there - fore carry out appropriate due diligence, adapted to its business, risk exposure and the concrete situation. Generally, the authorities expect a high degree of due diligence assessing sanctions risks. Freeze obligations extend to everything belonging to, held or controlled by a listed person. The decisive ownership threshold is 50% or more, assessed cumu - latively. Control may also be established where listed persons exercise de facto influence – eg, through the right to appoint a majority of the governing body. 4.4 Licences, Derogations and Exceptions Derogations and exceptions are granted only to a very limited extent. Provisions on exemptions may follow from the specific sanctions regulation. Applications are submitted to DEKSA with a substantiated expla - nation. Most sanctions regulations also allow DEKSA to grant a derogation in “particular cases”, to which conditions may be attached. Asset-freeze provisions are typically coupled with exemptions for humanitarian actors and necessary payments, some applying automatically and others requiring DEKSA authorisation. 4.5 Extraterritorial Sanctions and Secondary Sanctions Risk Operators must comply with sanctions implemented nationally. Norway does not impose extraterritorial sanctions and has not enacted blocking legislation to counteract the effect of extraterritorial sanctions imposed by third states. Where a Norwegian operator falls within a foreign state’s jurisdictional reach, it must comply with that state’s sanctions – eg, where a sufficient US nexus exists.
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